Why does the world of business persist in trying to make concepts work after they’ve repeatedly failed?

As pointed out last week, this seems to be a pattern. Whether the repeatedly failed idea is incentive pay, recruiting, performance appraisals, outsourcing, or waterfall software development, plausibility appears to trump the evidence, over and over again.

We need to know why. Otherwise we’ll just do it all over again with the next idea. There isn’t just one reason the world of business throws lots of good money after bad, either — there are quite a few. To get you started:

The Edison Ratio

Last week’s column mentioned this: One reason businesses persist in trying to make failed concepts work is that they should. As Edison pointed out, genius is one percent inspiration and ninety-nine percent perspiration, so the odds that failures are the result of flawed execution are high.

Also, few ideas are either purely good or purely bad, and in fact, you’d do yourself a service by eliminating “good” and “bad” from your business vocabulary altogether. Some ideas are better than others; that’s about all you can say about such things. It’s a very rare idea that’s so good it will survive hapless execution. Almost as rare are ideas so bad that they’re doomed to fail even when executed with immense skill.

The close but no stogie syndrome

The first automobiles weren’t practical forms of transportation — they were for hobbyists and tinkerers, but were in all respects inferior to the horse when you wanted to get around, even when the driver had paved roads available.

The first personal computers weren’t useful for very much, either — they were also for hobbyists and tinkerers. They needed lots of improvements before they were ready for prime time.

The take-home lesson: Many ideas that fail can, with the right refinements, become spectacular successes.

It worked once, in limited circumstances

“What do you mean, incentive pay has never worked? Companies have paid commissions since time began, and it seems to motivate the sales force pretty well.”

Yup. Commissions do motivate sales representatives — so much so that the profession has gained something of an unsavory reputation for doing anything … anything … to close a deal.

Commissions work to motivate sales professionals so long as all that matters is making a sale. As companies start to care about customer retention and long-term customer relationships, commission structures either become more complex or start to actively interfere with the company’s strategic goals.

Lots of ideas work in specific circumstances. Mathematicians haven’t invented numbers small enough to describe how many work in all circumstances. Which is why very often, the right answer isn’t to either stay with an idea or to give it up. It’s to figure out where it fits and where it doesn’t.

Flock mentality

Ever hear a flock of parrots wake up in the jungle? The way it works is that one wakes up and squawks. That wakes up some more parrots, who repeat the squawk, waking up others until they’re all squawking.

That doesn’t make the original squawk a blinding insight that must be true. You’re just hearing a bunch of parrots, repeating what each other are saying.

Sometimes, in business, all that’s happened is that someone said (or wrote) something with a lot of confidence — enough so that someone else decided to repeat it. Pretty soon, enough companies are outsourcing IT to India and manufacturing to China (with whoever is promoting the idea publishing lots of books and articles explaining how great it’s going to be) that all the rest figure they’re missing the boat and start making their own plans, too.

This is especially likely when the idea being promoted creates a pleasing narrative — a story that reinforces a decision-maker’s biases.

IT outsourcing, for example, fits right into a commonplace executive bias that IT is a pain in the neck to oversee; outsource it and it becomes Someone Else’s Problem. That this doesn’t hold up to any scrutiny at all doesn’t matter, because very few people scrutinize ideas that fit into narratives that please them.

The best part of this is that when whatever-it-is doesn’t work the problem has to be with the execution. All the CEO has to do is fire someone (sorry, “hold someone accountable”) and the board of directors will be happy as can be.

Now comes the hard part: Everything you just read is about you. And me. It’s about them, too, but they don’t matter. You and I are completely vulnerable to all of the above. Which leads to this uncomfortable question:

What are you going to do about it?